Forbes & Company reports 20.2% EBITDA growth in 2016 and 7.2% Revenue growth
30-05-2016 • About Forbes & Company (
$FORBESCO) • By InTwits
Forbes & Company reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Forbes & Company is a fast growth stock: FY2016 revenue growth was 7.2%, 5 year revenue CAGR was 21.3% at FY2016 ROIC 6.1%
- Forbes & Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 3.4%.
- CAPEX is quite volatile: ₹903m in FY2016, ₹1,809m in FY2015, ₹932m in FY2014, ₹510m in FY2013, ₹317m in FY2012
- The company has potentially unprofitable business model: ROIC is 6.1%
- It operates with high leverage: Net Debt/EBITDA is 4.3x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Forbes & Company's Revenue increased on 7.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 8.1 pp from 19.1% to 27.2% in FY2016.
Net Income margin decreased slightly on 1.9 pp from 0.92% to -1.00% in FY2016. Net Income margin followed a declining trend at -1.1 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.4% in FY2016. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 3.5%. Forbes & Company maintained rich investment policy and has spent a big chunk of EBITDA (51.3%) to CAPEX. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2015 at 5.1%.
Return on investment
The company operates at low but positive ROIC (6.1%) and negative ROE (-9.5%). ROIC decreased slightly on 2.0 pp from 8.0% to 6.1% in FY2016. ROE dropped on 16.8 pp from 7.3% to -9.5% in FY2016. ROE followed a declining trend at -6.5 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and 5.4x Debt / EBITDA. Net Debt / EBITDA dropped on 2.0x from 6.3x to 4.3x in FY2016. Debt dropped on 11.3% while cash jumped on 30.8%. During the last 5 years Net Debt/EBITDA topped in FY2015 at 6.3x.
Forbes & Company has short term refinancing risk: cash is only 78.5% of short term debt.
Financial and operational results
Forbes & Company ($FORBESCO) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17,695 | 19,993 | 30,672 | 35,461 | 38,012 | 7.2% |
| EBITDA | 1,369 | 970 | 1,552 | 1,463 | 1,760 | 20.2% |
| Net Income | 525 | 856 | 401 | 325 | -379 | -216.7% |
Balance Sheet
|
|---|
| Cash | 1,043 | 799 | 1,746 | 1,441 | 1,885 | 30.8% |
| Short Term Debt | 1,327 | 1,655 | 3,939 | 2,967 | 2,400 | -19.1% |
| Long Term Debt | 2,662 | 2,314 | 5,047 | 7,713 | 7,070 | -8.3% |
Cash flow
|
|---|
| Capex | 317 | 510 | 932 | 1,809 | 903 | -50.1% |
Ratios
|
|---|
| Revenue growth | 22.4% | 13.0% | 53.4% | 15.6% | 7.2% | |
| EBITDA growth | 58.3% | -29.2% | 60.0% | -5.7% | 20.2% | |
|
|---|
| EBITDA Margin | 7.7% | 4.9% | 5.1% | 4.1% | 4.6% | 0.5% |
| Net Income Margin | 3.0% | 4.3% | 1.3% | 0.9% | -1.0% | -1.9% |
| CAPEX, % of revenue | 1.8% | 2.6% | 3.0% | 5.1% | 2.4% | -2.7% |
|
|---|
| ROIC | 12.5% | 6.4% | 9.2% | 8.0% | 6.1% | -2.0% |
| ROE | 15.5% | 21.9% | 9.2% | 7.3% | -9.5% | -16.8% |
| Net Debt/EBITDA | 2.2x | 3.3x | 4.7x | 6.3x | 4.3x | -2.0x |
Peers in Industrial Machinery
Below we provide Forbes & Company benchmarking against other companies in Industrial Machinery industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Batliboi ($BATLIBOI) | - | - | - | -54.5% | 74.2% |
| Wpil ($WPIL) | - | 38.4% | 0.3% | -5.5% | 51.3% |
| Lloyd Electric & Engineering ($LLOYDELENG) | - | - | - | 22.3% | 27.3% |
| Manugraph India ($MANUGRAPH) | - | -17.4% | -19.8% | -14.6% | 22.6% |
| Isgec Heavy Engineering ($SARASIND) | - | -3.8% | - | - | 14.2% |
| |
|---|
| Median (24 companies) | 10.7% | 2.2% | 0.3% | 2.8% | 4.1% |
|---|
| Forbes & Company ($FORBESCO) | - | 13.0% | 53.4% | 15.6% | 7.2% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bell Agromachina ($BELAGRO) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 40.5% | - |
| Dhp India ($DHPIND) | - | - | - | 26.3% | - |
| Shilp Gravures ($SHILGRAVQ) | - | - | - | 19.4% | - |
| Solitaire Machine Tools ($SOLIMAC) | - | - | - | 19.4% | - |
| Wendt (India) ($WENDT) | 28.3% | 21.6% | 18.6% | 19.0% | 16.5% |
| |
|---|
| Median (46 companies) | 11.6% | 10.0% | 10.7% | 10.7% | 10.4% |
|---|
| Forbes & Company ($FORBESCO) | 7.7% | 4.9% | 5.1% | 4.1% | 4.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 14.0% | - |
| Shakti Pumps (India) ($SHAKTIPUMP) | 5.8% | 19.0% | 6.1% | 9.9% | 7.5% |
| Wendt (India) ($WENDT) | 13.5% | 9.0% | 8.8% | 9.4% | 9.3% |
| Ingersoll-Rand (India) ($INGERRAND) | 4.3% | 10.9% | 3.6% | 9.2% | 6.7% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | 6.5% | 1.8% | 0.5% | 8.8% | 16.2% |
| |
|---|
| Median (23 companies) | 5.8% | 4.6% | 2.9% | 3.1% | 3.4% |
|---|
| Forbes & Company ($FORBESCO) | 1.8% | 2.6% | 3.0% | 5.1% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greaves Cotton ($GREAVESCOT) | - | 24.8% | 16.3% | 26.7% | 25.7% |
| Honda Siel Power Products ($HONDAPOWER) | 16.9% | 8.8% | 11.5% | 15.3% | 18.3% |
| Lakshmi Machine Works ($LAXMIMACH) | 18.0% | 11.7% | 16.2% | 17.6% | 18.2% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | - | - | 11.9% | 13.9% | 17.0% |
| Ion Exchange (India) ($IONEXCHANG) | 11.0% | 15.1% | 8.8% | 13.1% | 16.4% |
| |
|---|
| Median (44 companies) | 13.5% | 11.7% | 11.3% | 13.0% | 10.8% |
|---|
| Forbes & Company ($FORBESCO) | 12.5% | 6.4% | 9.2% | 8.0% | 6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wpil ($WPIL) | 2.4x | 2.3x | 2.2x | 0.8x | 5.4x |
| Kirloskar Brothers ($KIRLOSBROS) | 2.4x | 1.3x | 1.1x | 1.5x | 4.7x |
| Elecon Engineering Co ($ELECON) | 3.0x | 3.2x | 4.0x | 3.1x | 3.9x |
| Dynamatic Technologies ($DYNAMATECH) | 5.0x | 4.1x | 3.4x | 2.7x | 3.8x |
| Shakti Pumps (India) ($SHAKTIPUMP) | 2.6x | 2.6x | 2.4x | 2.0x | 2.8x |
| |
|---|
| Median (34 companies) | 1.0x | 1.4x | 0.0x | 0.0x | 0.0x |
|---|
| Forbes & Company ($FORBESCO) | 2.2x | 3.3x | 4.7x | 6.3x | 4.3x |
